Researching “Corporate Insiders” Identified in S.E.C. Filings: how to use forms 3, 4, and 5

“Corporate insiders,” as they are identified by the SEC, is a particular category of especially influential people in a company. While these people may not be named on the company website, they are all listed in SEC records in the EDGAR deep web database.

First, who are “corporate insiders” and why should a researcher care? “Corporate insiders,” according to the SEC definition, are company officers, directors, and executives that own 10% or higher stake in any kind of a company’s securities. As a researcher, you will want to find and investigate these individuals because they have outsized influence on the company due to their jobs and/or holdings.

HOW TO FIND INSIDERS

A researcher can identify corporate insiders for a specific company by looking up the company’s filings of forms 3, 4, and 5 in the SEC’s database named EDGAR (for more about EDGAR, see the previous post on researching companies). Each of these forms will identify an insider’s name, position in the company, and their securities holdings.

Form 3 identifies someone when they become an insider. Form 4 reports that an insider made a major financial transaction with their company holdings. Form 5 is simply the annual report of the person’s holdings.

STEP BY STEP GUIDE:

1 – go to the SEC database at (https://www.sec.gov/edgar/searchedgar/companysearch.html)

2 – This database is pretty straight forward, you just search for a company by its name and the database gives you each of the company’s filings. However, the default setting excludes the forms we want, so you need to unclick that. To do so, click on where it says “more options” (see below)

3 – Then, at the bottom, beneath where it says “Ownership forms 3, 4, and 5,” you see that the default setting is “exclude” so instead you want to click “include.”

4 – Searching the name “EXXON MOBIL CORP” yielded the following results

5 – clicking on the “documents” button for the first filing at the top brings you to this confusing looking page below, from here you can click on the first link under the word “document”, the first link should end in “.html”

6 – Here, we have the filed record itself. I blocked out the person’s name and title. But if you go to any record like this you would see the person’s name in Box 1 and in Box 4 the person must identify as a “10% owner,” “director,” or “officer.” If they are an officer, they must specify their title. Note that even though this person is not a 10% owner, they must list their ownership in company securities in Table I.

ALL THE NAMES IN ONE PLACE

The information from all of these forms are also compiled in one place. You can find a list of all of the insiders’ names, their positions, and their transactions on the company’s Ownership Information page. For an example, see the picture below of part of the Exxonmobil Ownership Information page on sec.gov.

To find this page, return to the page from step 5 and click on the red word “issuer” to the right of “Exxon Mobil Corp” near the bottom. This will generally be the same for all other companies.

One can also click on the listed names, which brings you to a page with all of their stock holdings in other companies as well. This is useful for researching corporate leadership.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s